By Tim Alexander
BLOOMINGTON, Ill. — As uncertainty remains over the possibility of a federal railroad strike , the U.S. fertilizer industry is bracing for a labor shutdown that could come as early as next week.
“We still do not have definitive word on the date that a strike could happen. If no other agreement is agreed upon, a strike could start as early as De. 5,” said Kevin “KJ” Johnson, executive director of the Illinois Fertilizer and Chemical Association (IFCA), in a November 23 message to fertilizer retailers. “In the worst-case scenario, embargoes of ammonia shipments will begin approximately five days prior to a strike (or) shutdown.”
Uncertainty surrounding a strike remains even though a Nov. 21 ratification vote was approved by 8 of 12 railroad workers’ unions. At issue: an overall majority of the 115,000 union rail workers rejected the proposed deal, which all 12 unions must ratify in order to avert a work stoppage.
“Out of the twelve unions, eight unions (representing about 45 percent of rail workers) have ratified the agreement, while four (representing about 55 percent of workers) rejected it,” said Johnson, adding that the negotiations centered around President Biden’s Emergency Board (PEB) recommendations and tentative contract agreements (TAs), issued in August.
“Republicans support imposing the August PEB recommendations and Democrats support the September TAs plus additional sick days. This dynamic started to take shape a few weeks ago. The middle ground between unions-carriers and political parties is the September TAs.”
Though a bipartisan agreement will be necessary “as the Senate needs to find sixty votes to do anything,” Johnson is holding out hope that Congress will intervene in the strike if a compromise cannot be reached very soon.
“IFCA and our national associations are looking for any reasonable solution. IFCA will continue to engage with our Illinois congressional delegation to advocate for a solution. Bottom line, presuming no surprises, we need Congress to take action to prevent the strike,” said Johnson.
In a letter to Congressional leadership, The Fertilizer Institute (TFI), based in Washington, D.C., urged Congress to get involved and end the threat of a federal lockout of rail workers.
The situation is compounded by continuing logistical and supply chain disruptions that remain unresolved, according to TFI president and CEO Corey Rosenbusch.
“There is zero elasticity in transportation at the moment,” Rosenbusch said in a news release. “We continue struggling with enough trucks, drivers, and most recently, barges. Low water levels have severely curtailed barge movements along the Mississippi River and have affected grain and fertilizer shipments. We’re operating without a backstop and ultimately consumers are going to be the ones paying for inaction.”
Mike Steenhoek, executive director of the Soy Transportation Coalition, said that even though eight of the twelve unions have ratified the tentative agreement, the workers of all twelve unions will not cross the picket lines – even if one single union holds out and does not accept the tentative agreement. “Given that four unions have voted against ratification, concerns are clearly on the rise that a strike or lockout is in the realm of possibility,’ Steenhoek noted.
Steenhoek agreed that with low water conditions along the inland waterwvay system, the question mark regarding rail service could not come at a worse time. “Rail service already has not been the lifeline it normally should be, but the potential for a strike or lockout is clearly causing much agitation in agriculture and the broader economy,” he said.
“An actual rail strike will clearly halt economic activity, but the threat of a rail strike can achieve this as well. For industries like agriculture, the decisions made today are determining where and how soybeans and grain will be shipped next month, two months from now, etc. Having a predictable supply chain is essential for agriculture to succeed, but this predictability is clearly impugned as we complete harvest and are in the midst of our key export window,” Steenhoek added.
The Soy Transportation Coalition has joined TFI, IFCA and other agriculture-based organizations to strongly encourage Congress and the Biden Administration to intervene to ensure a railroad strike or lockout does not occur, according to Steenhoek.
“We will continue to do so in the days and weeks to come,” he said, on Nov. 21.
U.S. Department of Agriculture data reveals that railroads transport 29 percent of soybeans, 33 percent of corn, and 60 percent of American wheat to export terminals. In addition to agricultural commodities and fertilizers, shipments of coal and propane, along with movements of finished automobiles, chemicals, animal feed, food products and consumer products could all come to a halt in the event of a strike.